This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

New book says World Cup will be no money bonanza for S. Africa

Prepare to be disappointed, South Africans. One of the world&#39;s leading sports economists says you&#39;re not going to get rich hosting next year&#39;s World Cup.

By Stephen WadeTHE ASSOCIATED PRESS

Wed., Dec. 2, 2009

Prepare to be disappointed, South Africans. One of the world's leading sports economists says you're not going to get rich hosting next year's World Cup.

There'll be no economic bonanza, according to Stefan Szymanski, and if experience matches the last World Cup in Germany, spending by visitors will be much less than the South African government shelled out preparing for the tournament.

"The next World Cup will not be an airplane dropping dollars on South Africa," authors Stefan Szymanski and Simon Kuper write in their new book Soccernomics.

The caveat comes just ahead of Friday's World Cup draw in South Africa, six months before the long-awaited tournament begins.

Using data analysis, history and psychology, the book punctures dozens of clichés about what it takes to win, and who makes money in soccer – and in sports in general. The aim is to do for soccer what Bill James in his Baseball Abstracts, and Michael Lewis in Moneyball did for baseball: examine the game from the outside, using social science and academic rigour.

Article Continued Below

"The problem for South Africa is that they have to spend quite a lot to build stadiums," Szymanski said in a telephone interview from London. "Germany could afford this, and it had stadiums anyway. But South Africa is a nation that can ill afford to fritter away a few billion on white elephants."

Following the 2002 World Cup, for instance, South Korea's K-League had difficulties filling the 10 new stadiums built for the tournament at a cost of more than $2 billion (dollar figures U.S.).

The book's argument is that hosting a World Cup or Olympics is an inefficient way to revitalize a city, or enrich a nation – especially one like South Africa, where a third of the population lives on under $2 a day. It can boost a nation's morale or image, but not much else.

"If you want to regenerate a poor neighbourhood, regenerate it," Szymanski and Kuper write. "If you want an Olympic pool and a warm-up track, build them. You could build pools and tracks all across London, and it would still be cheaper than hosting the Olympics."

Szymanski, an economics professor at Cass Business School in London, and Kuper, a sports writer living in Paris, do lots of myth-busting. They even talk of opening a consulting firm for leagues and clubs, promising to improve performance and save money.

"We are not trying to take the magic out of soccer," Szymanski said in the interview. "But we want to understand the patterns, because they are not completely random."

Some of the sometimes surprising findings are:

– The huge transfer fees spent in European club soccer bear little relation to where the club finishes in the league.

– By contrast, spending on player salaries explained very accurately where a club finishes.

– Researchers predicted how Chelsea players would take their penalties in the 2008 Champions League final, won by Manchester United in a shootout.

– On the soccer transfer market: teams shouldn't buy after big tournaments like the World Cup.

– Contrary to popular belief, the word "soccer" originated in England, not the United States.

– Norway is the country that loves soccer the most. Per capita, it's also the best in the world at sports.

– Tournaments such as the World Cup stop thousands from killing themselves – no one can stop watching.

– According to 21 years of data, taking into account national income and population size, Honduras is the most overachieving country in world soccer and Canada is the most underachieving.

The book suggests the United States, Japan, and Australia are rising powers on the world soccer scene. National teams in China, Iraq, Turkey and India could emerge as incomes rise and they pick up European expertise. African nations struggle because they are poor and can't buy European help.

The United States, in particular, because of its population and wealth – two factors that explain success – could be the first of the nations on the rise to win a World Cup.

"I think the one missing link for the United States is the transfusion of European knowledge into the game, which has largely been resisted," Kuper said, speaking from Paris. "The idea remains that an American coach can do it alone. But the best coaching is in western Europe."

In fairness to American-born coaches, Bruce Arena led the U.S. to the World Cup quarter-finals in 2002, and current coach Bob Bradley's team had a mostly easy run to South Africa.

Szymanski and Kuper point out that most soccer clubs are not only poorly run, but even giants like Real Madrid and Manchester United are small businesses dwarfed by the real titans of industry. In 2008 the average club in the English Premier league had revenue of $150 million, compared with $100 million for a single British Tesco supermarket.

Soccer clubs provide lots of entertainment: newspaper stories, reports on Internet sites, computer games, fodder for radio and TV talk shows, and soccer talk over dinner, at work or with a few beers.

"All this entertainment is made possible by soccer clubs, but they cannot appropriate a penny of the value we attach to it," the authors say. "Chelsea cannot charge us for talking or reading or thinking about Chelsea."

They cite a 2009 annual survey by the accounting firm Deloitte showing that Real Madrid led the "Soccer Money League" with revenues of about $475 million. Manchester United was No. 2 at $422 million. The rankings are based on how much the clubs sell, not on profits.

Ranking the clubs by profits would be embarrassing.

Watford, Reading and Arsenal – the last coached by Arsene Wenger, a trained economist – were the three most profitable in the Premier League, though Watford and Reading have since been relegated.

Chelsea and Manchester United, who have won the past five Premier League titles since Arsenal's 2004 win? Among the least profitable.

The Toronto Star and thestar.com, each property of Toronto Star Newspapers Limited, One Yonge Street, 4th Floor, Toronto, ON, M5E 1E6. You can unsubscribe at any time. Please contact us or see our privacy policy for more information.

More from the Toronto Star & Partners

LOADING

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com